Zanzibar alone reportedly owes the firm Sh127.88 billion out of a total debt amounting to Sh275.38 billion, while the Tanzania government owes it Sh52.53 billion and a Sh94.97 billion debt belongs to private customers.
Although Tanesco has already issued a two-week ultimatum for debtors to ‘begin paying’ their bills, its effectiveness looks quite uncertain.
Tanesco’s notice has come out barely a week after President John Magufuli directed the utility to disconnect power to all defaulters that owe it huge sums, including the Zanzibar government.
It’s obvious that an executive order from the president has to be met somehow. Indeed, due to the fact that the president gave the directive, certainly all entities under his government will have to pay the outstanding bill, which amounts to Sh52.53bn.
Similarly, the so-called private customers will have to compel with the order. With such a blessing from the executive, Tanesco will obviously disconnect power to those who may fail to pay.
However, Zanzibar may not be able to comply with the notice. It’s not known how such a debt was left to pile up in Zanzibar without any sustainable action. Sh127.88 billion is a huge amount of money! It is unlikely that the archipelago clients were left unbilled for a long time.
A situation like this one is what leaves many power consumers in a state of dilemma, particularly whenever the firm considers increasing power tariffs.
Last December, the Energy and Water Regulatory Authority (Ewura) approved a tariff hike of 8.53 per cent. The hike was less than half of what the power utility had requested to cover its losses.
However, the hike was ultimately rejected by the president, going even further to cost the job of its then MD, Felchesmi Mramba. Now, with such a huge debt, what would be the basis of hiking tariffs as a solution to losses incurred instead of putting more effort in debt collection?
The Zanzibar power issue is more complicated because it looks more political over commercial. The piled bill is a vivid example of entertaining politics in commercial entities.
Now, we are not well informed whether the huge Zanzibar debt is due to failure by the Zanzibar Electricity Corporation (Zeco) to collect payment from its customers or simple negligence by it to remit the collected monies to Tanesco.
If prudent actions are not deployed to ensure power supplied to the islands is paid for – and in good time - Tanesco should not expect any commercial gains over that end.
If a demarcation line is not drawn between politics and commercial values with the authorities in Zanzibar, it will be difficult for Tanesco to win loyal customers who will back its quest for any tariff hike.
Indeed, upon his arrival from an overseas visit, Zanzibar President Dr Ali Mohamed Shein said that if Tanesco disconnected power to the island, they would resort to the use of locally made kerosene lamps (vibatari).
However, he was confident that the Union government would not get to that decision due to the good relationship between the two sides of the union.